Legal & Regulatory
By Dezan Shira & Associates
Editor: Tracie Frost
The possibility of foreign law firms to open offices in India took a step forward this week when reports emerged that the Bar Council of India (BCI) drafted rules to allow foreign lawyers to practice in India. The new rules would allow foreign lawyers and law firms to set up offices in India to practice non-Indian law, after registering with the BCI and paying registration fees of US$ 25,000 for individual lawyers and US$ 50,000 for law firms. Practitioners would also be required to make security deposits of US$ 15,000 or US$ 40,000 for individual foreign lawyers and law firms.
Under proposed changes, foreign lawyers would be allowed to do all non-Indian law transactional legal work and could hire Indian lawyers or go into partnership with Indian lawyers. Under the proposed rules, foreign lawyers would be allowed to work for clients with foreign headquarters in international arbitrations held in India. However, foreign lawyers would not be allowed to provide any legal advice relating to courts, tribunals, boards or statutory authorities.
By Siddhartha Thyagarajan
India’s Union cabinet recently approved a bill that will allow several commercial establishments to operate for 24 hours a day. The Model Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2016 will permit malls, shops, restaurants, banks, and cinema halls to operate on a 24/7 basis. The bill is to have a significant impact on India’s business climate, market dynamics, and employment rate.
The proposed Act will cover all premises and shops, with the exception of those covered under the Factories Act 1948. However,it should be noted that the Act is only advisory in nature. State governments can choose to accept or reject the Act and implement it accordingly. Thus, the impact on businesses will be determined by the respective state in which the business operates.
E-Commerce Sector Reacts to Draft GST Bill
The government released Draft Model Goods and Services Tax (GST) Laws on June 14 in an attempt to ensure clarity and gauge stakeholder supporter. Following this, new confusion has emerged with regards to the proposed bill’s impact on the e-commerce sector.
Government to Simplify Process for Select Importers
In order to ease processing norms for importers, the Ministry of Finance is considering the integration of two existing regulatory schemes – the Accredited Clients Program (ACP) and the Authorized Economic Operator (AEO). The revamped AEO scheme will subsequently have an expanded scope.
Digital Equalization Levy of Six Percent from June 1, 2016
The Finance Act 2016 has introduced a digital equalization levy, or ‘Google tax’, of six percent, with effect from June 1. It is applicable only in the case of business to business transactions. When a person makes the payment to a non-resident (without permanent establishment) that exceeds an aggregate of US$ 1493 (Rs 1 lakh) a year, a withholding tax – at six percent of the gross amount paid – is imposed as equalization levy.
Passage of Bankruptcy Law
The Insolvency and Bankruptcy Code, 2016 was passed by the Indian parliament on May 11. If the bill gets enacted (after the President’s assent) by May 31, it would improve India’s ranking in the World Bank’s Ease of Doing Business report. India currently ranks 130 out of 189 countries overall and 136th on the parameter of resolving insolvency.
By: Siddhartha Thyagarajan
Recent legislative and judicial actions in India’s capital of Delhi have caused significant disruption to the establishment of businesses. In the past few weeks, Delhi has implemented two measures to combat the rising levels of pollution in the mega city. Both have influenced various facets of Delhi’s economy, were particularly harsh on certain businesses, and inadvertently punished consumers in the city.
The plans were introduced with noble intentions, but affected business operations for numerous companies. Most of these companies were underprepared to cope with changes in Delhi’s economic landscape. This underlined the importance of preparation and adaptation for businesses that operate in India – companies that keep abreast of changes in the legislative and judicial space can mitigate the risks that their businesses face.